On the Dash:
- More than 20% of new-vehicle buyers paid over $1,000 per month in Q4 2025, setting a new record.
- Average new-vehicle payments and loan amounts both reached all-time highs, worsening affordability pressures.
- Longer loan terms remain common as buyers stretch budgets, even as interest rates ease slightly.
New-vehicle financing and affordability challenges continue to put pressure on car shoppers. More than one in five new-car buyers committed to monthly payments surpassing $1,000 during the final quarter of 2025, according to Edmunds data. This surge hit an all-time high, growing 19.1% from the previous quarter and increasing 18.9% compared to a year earlier.
The average monthly payment for financed vehicles also reached another all-time high in 2025 Q4, rising to $772. It marks a 2.4% increase from the third-quarter average of $754 and from a year ago.
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With the average price of a new vehicle recently surpassing $50,000, many shoppers are being priced out of the market. However, buyers who purchased used cars also felt the squeeze as affordability pressures persisted. A record 6.3% commiting to monthly payments over $1,000, compared to 6.1% in the third quarter and 5.4% a year ago.
The trend of shoppers borrowing significant sums to purchase new vehicles continued its upward climb. The average financing amount for new-vehicle purchases reached an all-time high of $43,759 in the fourth quarter of 2025, up from $42,647 in the third quarter and $42,113 a year ago.
To manage high monthly financing costs, more buyers opted for longer loan terms. During the fourth quarter, 20.8% of all financed new-vehicle purchases were 84-month or longer terms. While it’s a slight decrease from the previous quarter’s 22%, it remains above the 17.9% from a year ago as consumers continue to grapple with rising costs and affordability pressure.
While interest rates eased slightly, they remain elevated compared to historical data. The average APR for new-vehicle purchases was 6.7% in the fourth quarter, a marginal decrease from 7% in the third quarter and 6.8% a year ago.
Promotional pricing and incentives remain hard to find. Only 3.1% of new-vehicle loans had a 0% rate, down from 3.3% in Q3. However, it’s a slight increase from the 2.4% average from a year ago.
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